EPPO indicts three Croatians and a company for subsidy fraud and document forgery

The European Public Prosecutor’s Office (EPPO) in Zagreb has filed an indictment against three Croatian citizens and one company for subsidy fraud and document forgery, following an investigation into their obtaining of financial support for small and medium-sized enterprises (SMEs), the EPPO said in a press release on Tuesday.

The defendants are alleged to have committed subsidy fraud on three occasions, during the period between 2019 and 2020, in order to unduly obtain financial support for SMEs financed by the European Structural and Investment Funds (ESIF) – specifically, three loans from the European Regional Development Fund (ERDF), including one to cover losses caused by the Covid-19 pandemic.

The investigation has found grounds to suspect that the individuals set up a chain of companies owned and managed by them to prove their eligibility to obtain financial support for SMEs. They are understood to have presented falsified investment plans and invoices for non-existent transactions, as well as unreliable corporate balance sheets that indicated a thriving business.

An analysis of the company’s cash flow revealed that the loans obtained were not used for their intended purposes, but were instead withdrawn from the business accounts by the defendants within 24 hours of receipt. It is believed that this fraudulent activity caused an estimated damage of 160,165.52 Euro, since the loans have not been returned, and their collection could not be made from the insurance funds.

If found guilty, the defendants could face prison sentences of from six months to ten years.

The EPPO is the independent public prosecution office of the European Union. It is responsible for investigating, prosecuting and bringing to judgment crimes against the Union’s financial interests.